1. Agenda for Day One Welcome and Introduction Review of Questionnaire
Discuss course outline
Presentation of Learning Effectiveness Research
Introduction to the subject

2. Most People Learn ……. Percentage of material/thing learnt
Learning activity
10%
Of what they read
20%
Of what they hear
30%
Of what they see
50%
Of what they see and hear
70%
Of what they talk over with others
80%
Of what they use and do in real life
95%
Of What they teach someone else
Source: Attributed to William Glasser; quoted by Association for Supervision & Curriculum Development Guide 1998.

3. Ashesi University COURSE TITLE : SERVICES MARKETING
SEMESTER : SECOND, 2009/2010
MODULE 8: Introduction to Services Marketing
Lecturer: Ebow Spio

4. Learning Objectives Explain service and services marketing
Understand the growing role of the service sector in the economy
Appreciate marketing challenges associated with services relative to goods
Build a case for an expanded marketing mix for services
Explain the framework for developing and implementing service marketing strategies

5. Defining Services
“ Something that can be bought and sold but that cannot be dropped on your foot” The Economist
“ The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange, satisfies an identified need” Palmer 2007
“ A service is an activity or series of activities of a more or less intangible nature that normally take place in interactions between the customer and the service employee or systems of the provider, which are provided as solutions to customer needs or problems” Hinson 2004

6. Defining Services Services
Are economic activities offered by one party to another
Most commonly employ time-based performances to bring about desired results to:
recipients themselves
objects or other assets for which purchasers have responsibility
In exchange for their money, time, and effort, service customers expect to obtain value from
Access to goods, labor, facilities, environments, professional skills, networks, and systems
But they do not normally take ownership of any of the physical elements involved

7. Estimated Size of Service Sector in Selected Countries
Cayman Islands (95%), Jersey (93%)
Bahamas (90%), Bermuda ( 89%)
Luxembourg (83%)
Panama (80%), USA (79%)
Japan (74%), France (73%), U.K. (73%), Canada (71%)
Mexico (69%), Australia (68%), Germany (68%)
Poland (66%), South Africa (65%)
Israel (60%), Russia (58%), S. Korea (56%)
Argentina (53%), Brazil (51%)
India (48%)
China (40%)
Saudi Arabia (33%)
Services as Percent of GDP 10 20 30 40 50 60 70 80 90

8. Services Pose Distinctive Marketing Challenges
Marketing management tasks in the service sector differ from those in the manufacturing sector
The eight common differences are:
Most service products cannot be inventoried
Intangible elements usually dominate value creation
Services are often difficult to visualize and understand
Customers may be involved in co-production
People may be part of the service experience
Operational inputs and outputs tend to vary more widely
The time factor often assumes great importance
Distribution may take place through nonphysical channels
What are marketing implications?

9. Differences, Implications, and Marketing-Related Tasks (1) (Table 1.1)
Most service products
cannot be inventoried
Intangible elements
usually dominate
value creation
Services are often
difficult to visualize
and understand
Customers may be
involved in co-
production
Implications
turned away
Harder to evaluate
service and distinguish
from competitors
Greater risk and
uncertainty perceived
Interaction between
customer and provider;
but poor task execution
could affect satisfaction
Marketing-Related Tasks
Use pricing, promotion, and
reservations to smooth
demand; work with ops to
manage capacity
Emphasize physical clues,
employ metaphors and vivid
images in advertising
Educate customers on
making good choices; offer
guarantees
Develop user-friendly
equipment, facilities, and
systems; train customers,
provide good support

10. Differences, Implications, and Marketing-Related Tasks (2) (Table 1.1)
Behavior of service
personnel and customers
can affect satisfaction
Hard to maintain quality,
consistency, reliability
Difficult to shield
customers from failures
Time is money;
customers want service
at convenient times
Electronic channels or
voice telecommunications
Difference
People may be part of
service experience
Operational inputs and
outputs tend to vary
more widely
Time factor often
assumes great
importance
Distribution may take
place through
nonphysical channels
Marketing-Related Tasks
Recruit, train employees to
reinforce service concept
Shape customer behavior
Redesign for simplicity and
failure proofing
Institute good service
recovery procedures
Find ways to compete on
speed of delivery; offer
extended hours
Create user-friendly,
secure websites and free
access by telephone

11. Value Added by Physical, Intangible Elements Helps Distinguish Goods and Services (Fig 1.6)
Physical Elements
High
Salt
Detergents
CD Player
Wine
Golf Clubs
New Car
Tailored clothing
Fast-Food Restaurant
Plumbing Repair
Health Club
Airline Flight
Landscape Maintenance
Consulting
Life Insurance
Internet Banking
Low
Intangible Elements
High
Source; Adapted from Lynn Shostack

12. The 8Ps of Services Marketing
Product Elements
Place and Time
Price and Other User Outlays
Promotion and Education
Process
Physical Environment
People
Productivity and Quality
Fig 1.9 Working in Unison: The 8Ps of Services Marketing

13. The 8Ps of Services Marketing: (1) Product Elements
Embrace all aspects of service performance that create value
Core product responds to customer’s primary need
Array of supplementary service elements
Help customer use core product effectively
Add value through useful enhancements
Planning marketing mix begins with creating a service concept that:
Will offer value to target customers
Satisfy their needs better than competing alternatives

14. The 8Ps of Services Marketing: (2) Place and Time
Delivery decisions: Where, When, How
Geographic locations served
Service schedules
Physical channels
Electronic channels
Customer control and convenience
Channel partners/intermediaries

15. The 8Ps of Services Marketing: (3) Price and Other User Outlays
Marketers must recognize that customer outlays involve more than price paid to seller
Traditional pricing tasks:
Selling price, discounts, premiums
Margins for intermediaries (if any)
Credit terms
Identify and minimize other costs incurred by users:
Additional monetary costs associated with service usage (e.g., travel to service location, parking, phone, babysitting, etc.)
Time expenditures, especially waiting
Unwanted mental and physical effort
Negative sensory experiences

16. The 8Ps of Services Marketing: (4) Promotion and Education
Informing, educating, persuading, reminding customers
Marketing communication tools
Media elements (print, broadcast, outdoor, retail, the Internet, etc.)
Personal selling, customer service
Sales promotion
Publicity/PR
Imagery and recognition
Branding
Corporate design
Content
Information, advice
Persuasive messages
Customer education/training

17. The 8Ps of Services Marketing: (5) Process
How firm does things may be as important as what it does
Customers often actively involved in processes, especially when acting as co-producers of service
Process involves choices of method and sequence in service creation and delivery
Design of activity flows
Number and sequence of actions for customers
Nature of customer involvement
Role of contact personnel
Role of technology, degree of automation
Badly designed processes waste time, create poor experiences, and disappoint customers

18. The 8Ps of Services Marketing: (6) Physical Environment
Design servicescape and provide tangible evidence of service performances
Create and maintain physical appearances
Buildings/landscaping
Interior design/furnishings
Vehicles/equipment
Staff grooming/clothing
Sounds and smells
Other tangibles
Manage physical cues carefully— can have profound impact on customer impressions

19. The 8Ps of Services Marketing: (7) People
Interactions between customers and contact personnel strongly influence customer perceptions of service quality
The right customer-contact employees performing tasks well
Job design
Recruiting
Training
Motivation
The right customers for firm’s mission
Contribute positively to experience of other customers
Possess—or can be trained to have— needed skills (co-production)
Can shape customer roles and manage customer behavior

20. The 8Ps of Services Marketing: (8) Productivity and Quality
Productivity and quality must work hand in hand
Improving productivity key to reducing costs
Improving and maintaining quality essential for building customer satisfaction and loyalty
Ideally, strategies should be sought to improve both productivity and quality simultaneously—technology often the key
Technology-based innovations have potential to create high payoffs
But, must be user friendly and deliver valued customer benefits

21. Marketing Must Be Integrated with Other Management Functions (Fig 1
Three management functions play central and interrelated roles in meeting needs of service customers
Customers
Operations
Management
Marketing
Human Resources

22. A Framework For Developing Effective Service Marketing Strategies: Overview
Understanding Customer Needs, Decision Making, and Behavior in Service Encounters
Building the Service Model
Managing the Customer Interface
Implementing Profitable Service Strategies

23. Key Points The role of services sector
Service sector dominates economy in most nations, many new industries
The service concept and its definition:
Services create benefits without transfer of ownership
Most employ time-based performances to bring about desired results in recipients or in assets for which they have responsibility
Customers expect value from access to goods, facilities, labor, professional skills, environments, networks & systems in return for money, time, effort
Services present distinctive marketing challenges relative to goods, requiring:
Expanded marketing mix comprising 8Ps instead of traditional 4Ps
Integration of marketing function with operations and human resources

24. Tutorial Assignments
1. A debate “In today’s world, every firm is a service firm” 2. What is so distinctive about services marketing that it requires a special approach, set of concepts, and body of knowledge?